California to Begin Issuing IOUs on Feb 1

Discussion in 'Economics' started by capmac, Jan 16, 2009.

  1. capmac


    Calif. tax refunds to be delayed starting Feb. 1

    Jan 16, 3:40 PM (ET)

    SACRAMENTO, Calif. (AP) - California's controller says he will begin a 30-day delay on tax refunds and other payments starting Feb. 1 because the state is running out of money.

    Controller John Chiang said Friday he must delay $3.7 billion in payments next month because lawmakers have failed to address California's growing deficit.

    With a $41.6 billion shortfall over the next year-and-a-half, the state is on the brink of issuing IOUs.

    Chiang says his office must continue education and debt payments but will defer money for tax refunds, student aid, social services and mental health programs.

    A severe drop in revenue has left the state's main bank account depleted. The state had been relying on borrowing from special funds and Wall Street investors; those options are no longer available.
  2. maxpi


    I live in CA... I would love to see the government simply go bankrupt and fold... they aren't fixing the roads very well anyhow, they are paying for every stray dog that wanders across the border, there is no political will to stop crime by simply hanging criminals..... who needs CA gov really?
  3. Wonder if people can use this same excuse making payments to CA "sorry, I am running out of money and cannot pay my taxes at this time. Here is an IOU."
  4. How are all the ILLEGAL immigrants supposed to welch off the state?

    All you Californian's should protest this. All your hard earned money isn't going to free medical, free food, free schooling for ILLEGAL immigrants?

    Someone start a rally!!! Go hug a tree (or better yet, chain yourselves to one)!!!!!

    Backwards liberal douchebags. Good riddance.
  5. Rome is burning!
  6. Daal


    What if they remove state residents right from moving out of that state(specially the wealthy)?(or indirectly by making it a expensive and long process in case they dont have the constitutional right)
    Its funny how the keynesians never take into account in the theory the LONG run impact of fiscal spending, they think like politicians who only care about the next year employment numbers
  7. California sucks.
  8. IMO, the crux of the problem in california, soon to be much of the united states, is the codified & legislatively mandated external influences upon the economy which can't be complied with in the current economic crisis.

    That's not to say that they won't - because they are legislated and compliance issues, nobody is willing to go to jail to oppose or disobey them. So, they cause massive distortions in reality. And because it is a legal issue, they should take forever to repeal, if they even can be (constitutional amendments, etc...)

    Ill-advised financial engineering may have put us in this mess, but its the legal straitjacket that is going to keep the chokehold. This is going to be a real grind. California is, probably, toast. Just wait until productive parts of the economy discover that they are not being paid what is owed them by the state government. They will leave in droves.
  9. Look back into history, how Arnold Schwarzenegger became the governor of California under very percussive circumstance (aka, energy crisis), it is time for revenge from democrats, perhaps. You must love politic and history.
  10. Have you eve consider that fed didn't really want to solve the issue of illegal aliens problem at all, it creates demand on housing, and paying for Social security but don't legible for its payment. When you own farms in the south, you know the rest of story.
    #10     Jan 17, 2009